DoD's $66.9M NMCI Services contract awarded to HPI Federal LLC for IT support

Contract Overview

Contract Amount: $66,867,697 ($66.9M)

Contractor: HPI Federal LLC

Awarding Agency: Department of Defense

Start Date: 2022-09-01

End Date: 2022-09-30

Contract Duration: 29 days

Daily Burn Rate: $2.3M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NMCI SERVICES - EUHW 9/22 - NEW ORDERS

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $66.9 million to HPI FEDERAL LLC for work described as: NMCI SERVICES - EUHW 9/22 - NEW ORDERS Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, indicating ongoing IT service needs. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The short duration of 29 days for this specific order suggests it addresses immediate or short-term IT needs. 5. The contractor, HPI Federal LLC, is positioned to deliver specialized IT services. 6. This contract falls under computer systems design services, a critical area for modern defense operations.

Value Assessment

Rating: good

The contract value of $66.9 million for a 29-day period is substantial, but without specific deliverables or service levels, a direct value-for-money assessment is challenging. However, the firm-fixed-price structure is a positive indicator for cost control. Benchmarking against similar IT service contracts of this scope and duration would be necessary for a more precise value assessment. The award is a delivery order against an existing IDIQ, implying that pricing was likely established during the initial IDIQ competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and encourages a wider range of innovative solutions, ensuring the government receives the best value.

Public Impact

The Department of the Navy benefits from enhanced computer systems design services. Military personnel and civilian staff likely receive improved IT infrastructure and support. The contract supports IT operations within Virginia, a key hub for defense activities. The delivery of these services ensures the continuity and effectiveness of critical defense IT systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics or service level agreements within the provided data.
The substantial value for a short duration raises questions about the specific services rendered and their necessity.
Limited insight into the competitive landscape beyond 'full and open' designation (e.g., number of bidders).

Positive Signals

Awarded under full and open competition, suggesting a fair and competitive process.
Firm-fixed-price contract type provides cost certainty for the government.
Contractor is HPI Federal LLC, an established entity in the federal contracting space.
Delivery order against an IDIQ vehicle indicates a structured approach to IT service procurement.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a vital component of the IT industry. This sector encompasses a wide range of services, including IT consulting, systems integration, and IT support. The federal government is a significant consumer of these services, with spending often concentrated in areas supporting defense, intelligence, and civilian agency operations. Comparable spending benchmarks would typically be found within broader IT services categories, where billions are spent annually across various agencies.

Small Business Impact

The provided data indicates that small business participation (ss and sb flags) was not a specific set-aside for this contract. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside. However, the prime contractor, HPI Federal LLC, may engage small businesses as subcontractors, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. As a delivery order under an IDIQ, the underlying contract likely has established oversight mechanisms. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

NMCI (Navy Marine Corps Intranet)
IT Services
Computer Systems Design Services
Department of Defense IT Contracts
Defense Information Technology Contracting Organization (DITCO)

Risk Flags

Potential for cost overruns if scope is not tightly managed, despite fixed-price.
Contractor performance risk if services do not meet required standards.
Dependency on a single contractor for critical IT services.
Limited transparency on the number of bidders in the 'full and open' competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.9 million to HPI FEDERAL LLC. NMCI SERVICES - EUHW 9/22 - NEW ORDERS

Who is the contractor on this award?

The obligated recipient is HPI FEDERAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $66.9 million.

What is the period of performance?

Start: 2022-09-01. End: 2022-09-30.

What is the track record of HPI Federal LLC in delivering similar IT services to the Department of Defense?

HPI Federal LLC has a history of performing IT services for the federal government, including the Department of Defense. Their experience often spans areas like network engineering, cybersecurity, and IT support. Analyzing their past performance on similar contracts, particularly those under the NMCI umbrella or similar large-scale IT vehicles, would provide insight into their capability and reliability. Past performance evaluations, if publicly available, would be crucial in assessing their track record. This specific contract, being a delivery order, suggests they were selected based on pre-existing qualifications and potentially past performance demonstrated during the IDIQ selection process.

How does the pricing of this $66.9M delivery order compare to similar IT support contracts awarded by the Navy?

A direct comparison of the pricing for this $66.9 million delivery order is challenging without knowing the specific services rendered and the duration. However, as a firm-fixed-price contract awarded under full and open competition, the expectation is that the pricing is competitive. To benchmark, one would need to identify comparable contracts for computer systems design services or IT support awarded by the Department of the Navy around the same period, considering factors like contract type, scope of work, and duration. The fact that it's a delivery order under an IDIQ suggests that the rates were likely negotiated and established during the initial IDIQ competition, which itself would have undergone a competitive evaluation.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential scope creep if the defined services are not precise, contractor performance issues, and the possibility of the fixed price not fully reflecting unforeseen complexities. Mitigation strategies are inherent in the contract type: the firm-fixed-price nature shifts cost risk to the contractor. Oversight by the Department of the Navy, including performance monitoring and acceptance of deliverables, is crucial. The 'full and open' competition aims to select a capable contractor, reducing performance risk. The short duration of the order may also limit the exposure to long-term performance risks.

How effective is the NMCI program in providing essential IT services to the Navy, and does this contract contribute to that effectiveness?

The Navy Marine Corps Intranet (NMCI) program is a large-scale, long-standing initiative aimed at consolidating and modernizing the Navy's IT infrastructure. Its effectiveness is often debated, with proponents citing standardization and cost efficiencies, while critics point to challenges in flexibility and responsiveness. This specific $66.9 million delivery order for computer systems design services likely contributes to the ongoing operational effectiveness of NMCI by addressing specific IT needs, such as system upgrades, design modifications, or specialized support. Its effectiveness is tied to how well it meets the defined requirements and supports the broader NMCI objectives.

What has been the historical spending trend for computer systems design services by the Department of the Navy?

The Department of the Navy consistently spends significant amounts on computer systems design services, reflecting the critical role of IT in modern naval operations. Historical spending data would show a trend of increasing investment in IT modernization, cybersecurity, and advanced systems. This spending is often channeled through large IDIQ vehicles like NMCI, from which delivery orders are issued. Analyzing past years' spending on similar NAICS codes (like 541512) would reveal the scale and consistency of this investment, highlighting the Navy's ongoing reliance on external expertise for its complex IT infrastructure.

What is the significance of this contract being a delivery order under an IDIQ contract?

A delivery order under an Indefinite Delivery/Indefinite Quantity (IDIQ) contract signifies that this is a specific task or order placed against a pre-negotiated contract vehicle. The IDIQ establishes the terms, conditions, and often the pricing structure for a range of potential services over a period. Issuing a delivery order allows the agency to procure specific quantities of goods or services as needed, without conducting a full, separate procurement for each instance. This approach offers flexibility and efficiency for recurring or anticipated needs, and the pricing for this $66.9M order was likely established during the competitive process for the parent IDIQ.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc.

Address: 1299 PENNSYLVANIA AVE NW STE 475, WASHINGTON, DC, 20004

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,867,697

Exercised Options: $66,867,697

Current Obligation: $66,867,697

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0020

IDV Type: IDC

Timeline